New wine, old noteskins
Commercial banks have begun partial compliance with the Supreme Court’s order, approving the use of old ₦1,000, ₦500 and ₦200 notes as…
Commercial banks have begun partial compliance with the Supreme Court’s order, approving the use of old ₦1,000, ₦500 and ₦200 notes as legal tender for 10 months. However, the Central Bank of Nigeria (CBN) and the Office of the Attorney General of the Federation (AGF) have kept mum on the matter. CBN spokesperson Isa Abdulmumin said, “Banks are paying old and new notes. They are all legal tender. Yes, the CBN has not issued an official statement on the issue. Anyone banks give to you, you can collect. We just want to make life easy for Nigerians.”
Nigerians have gone through unnecessary pain over the last two months due to the CBN’s ineptitude in properly rolling out policies that affect the livelihood of the citizens. For all of its success in driving financial inclusion, the reality is that it was unwise to pursue a rapid pullout of cash in a country where only 10 to 20% of the population use a smartphone and 37.3% access the internet on a mobile device. Considering that 104.9 million Nigerians did not use the internet regularly at the start of 2022, cash is indispensable. The primary aim of the currency redesign programme was to frustrate politicians. Therefore, since that window of opportunity is past, dogmatically sticking to a discredited policy stance will harm rather than aid both economic recovery and the democratic transition. The CBN has poorly communicated with end customers, reducing trust in the institution and the national currency. As a result of that trust disconnect, not many people have aligned their behaviour with the new directive. Merchants refuse to accept old notes in some parts of the country, and the issues around the new currency in circulation persist. Both old and new naira notes are unavailable to the citizens, and bank queues are still long days after the verdict. The only way to recapture that trust is to communicate clearly and efficiently. Firm clarity needs to come from all stakeholders on this matter. The Supreme Court pronouncement should stand, and all stakeholders should align accordingly. The CBN needs to put out a definitive statement on this matter to give the banks the cover they need to fully implement the verdict and the Nigerian people the confidence to accept this new dual-state and utilise the currency. Uncertainty is undesirable for any economy. All stakeholders must come together to counter it.